Using the correct tax code ensures the right amount of PAYE is deducted from your wages. The wrong code leads to either a surprise tax bill (underpayment) or giving IRD an interest-free loan (overpayment). You notify your employer of your tax code using the IR330 form.
Use tax code M for your main job (no student loan). Add SL to any code if you have a student loan (e.g., M SL). Use ME if you qualify for the Independent Earner Tax Credit (income $24,000–$48,000, no WFF). For a second job, use S, SH, ST, or SA depending on your combined total income. Never use M for a second job — this causes underpayment.
Full List of NZ Tax Codes
Primary Employment (Main Job)
| Code | When to use |
|---|---|
| M | Main job, income from all sources likely to be over $14,000 |
| ME | Main job; income $24,000–$48,000; eligible for Independent Earner Tax Credit; no WFF, no student loan |
| M SL | Main job + student loan repayment (no IETC) |
| ME SL | Main job + student loan; eligible for IETC |
Secondary Employment (Second Job / Additional Jobs)
| Code | Combined income from all sources | Rate applied |
|---|---|---|
| SB | $14,000 or less | 10.5% |
| S | $14,001–$48,000 | 17.5% |
| SH | $48,001–$70,000 | 30% |
| ST | $70,001–$180,000 | 33% |
| SA | Over $180,000 | 39% |
Add SL to any secondary code if you have a student loan (e.g., S SL, SH SL).
Casual Agricultural Workers
| Code | When to use |
|---|---|
| CAE | Casual agricultural workers (the only income is casual ag work) |
Elected Not to Receive IETC
If you receive Working for Families or otherwise do not qualify for IETC, use M rather than ME.
No-Notification Rate
If you do not provide an IR330 to your employer, they must deduct tax at 45% — the highest possible rate. Always provide an IR330.
Choosing the Right Code: Decision Guide
Step 1: Is this your main (or only) job?
- Yes → Go to Step 2
- No → Use a secondary code (SB, S, SH, ST, SA) based on combined income
Step 2: Do you have a student loan?
- Yes → Add SL (e.g., M SL or ME SL)
- No → Continue
Step 3: Is your income $24,000–$48,000 from all sources, and you do not receive Working for Families?
- Yes → Use ME (to receive the IETC through your wages)
- No → Use M
How to Fill In an IR330
The IR330 (Tax code declaration) is given to you by your employer when you start work. You fill in:
- Your full name
- IRD number
- Tax code (e.g., M, M SL, SH)
- Whether you have a student loan
- Signature and date
You can download a blank IR330 from ird.govt.nz if your employer does not provide one. You can change your tax code at any time — just give your employer a new IR330.
What Happens If You Use the Wrong Code
Using M for a Second Job (Too Low)
If you use code M for a second job, each employer taxes your income as if it starts from $0. At year end, IRD combines your income and finds you underpaid — you receive a tax bill.
Example:
- Main job: $55,000 (correctly taxed at M)
- Second job: $15,000 (incorrectly taxed at M — taxed as if $0–$15,000 at low rate)
- Correct combined tax: 30% applies to the second job income
- Tax underpaid: potentially $1,500–$2,000 to repay
Using Too High a Secondary Code
You overpay through the year and receive a refund — but you’ve had less take-home pay all year. This is inefficient but carries no penalty.
Independent Earner Tax Credit (IETC) and Tax Code ME
The ME code delivers the IETC through your wages by reducing the PAYE withheld. The IETC is worth up to $520/year for eligible earners.
You qualify for ME if:
- You have only one source of income
- Income is between $24,000 and $48,000 from all sources
- You do not receive Working for Families
- You do not have a student loan (if you do, use ME SL)
If you earn between $44,000 and $48,000, the IETC abates — ME partially delivers the credit.
See our Independent Earner Tax Credit (IETC) guide for full details.
Student Loan and Tax Codes
If you have a NZ student loan, add SL to your tax code. Your employer deducts student loan repayments in addition to PAYE.
Standard repayment rate: 12 cents per dollar earned above the repayment threshold ($22,828 annual income as at 2026).
If you have a repayment deduction exemption (e.g., you are overseas-based), do not add SL.
Frequently Asked Questions
I have two jobs. Which one is my main job?
Your main job is typically the one that pays the most, or where you work the most hours. It does not have to be the job you started first. Assign code M (or ME) to the highest-paying job and a secondary code to the other.
My employer asked me to complete an IR330. What do I put for tax code?
Use code M for your main job (assuming this is your only or primary job). If you have a student loan, use M SL. If your income is $24,000–$48,000 and you want the IETC, use ME.
I changed jobs mid-year. Do I need to re-complete an IR330?
Yes — provide your new employer with an IR330 at the start of employment. If your old employer’s income is still flowing during the same year, consider whether your combined income changes your secondary job code.
Can I request a special tax code?
Yes. If your tax deductions don’t match your expected liability (e.g., you have significant deductible rental losses), you can apply to IRD for a special tax code. IRD reviews your situation and may reduce your withholding rate. Apply through myIR.